Reduced Leverage And Increased Expected Losses Dogging Huntington Bancshares

I'm worried that Huntington Bancshares (HBAN) was "driver-poor" after fourth quarter earnings, and now, with management guiding away from operating leverage in 2020 and warning of likely future reserve additions, it seems like the Street got its reason to sell off the name and stay away. The shares are down about a third since that last article, underperforming the company's peer group by a slight margin.

Once again, I find my argument for Huntington largely revolving around "it's not really as bad as the price says it is". I think management is being "prudently aggressive" in building reserves, particularly against the energy book, and I do think there will be pre-provision profit growth again late in 2020, and likely into 2021 as well - not a lot, granted, but some. While the shares do look notably undervalued to me on long-term core earnings, I'll grant that there are broadly equal banks trading at discounts to tangible book (versus Huntington's slight premium), so I can't make a really compelling call that you should choose this name over another of the many undervalued regional/super-regional banks.

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Reduced Leverage And Increased Expected Losses Dogging Huntington Bancshares